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> If houses ever return to good affordability I'm screwed. Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house

> If houses ever return to good affordability I'm screwed. Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. > I have to refinance every 5 years, because that's the game in the UK, so if rates spike I'm also screwed. This is the real problem. It's partly our fault, of course, for agreeing to a mortgage which we couldn't afford if the interest rates doubled. You know exactly what you're signing up to, but you still do it. The trouble is there's no choice. The finance industry has us by the balls. I don't even think of it as a housing crisis, I think of it as finance crisis. The real problem is banks control far too much of our lives. The entire money supply is essentially just mortgages. This abstraction we call money has been taken way too far.

dustincoates 2y ago
> Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. I don't know how it is in the UK, but in Paris, I hear from a lot of people that their retirement plan is to sell their Parisian apartment and move to a lower cost area with what they've gained. Doesn't work out if your "investment" is underwater.
- globular-toast 2y ago
  If the Parisian apartments become undesirable and the low cost areas become desirable then, yeah, it wouldn't work out. But that's not what we're talking about. House prices going down across the board makes no difference. You sell your apartment for a lower number but you buy the new place for a lower number too. The numbers are just made up and don't matter. You can't eat a number and it won't keep you warm or dry. It's so weird to me that even in a place like this people can't see beyond the numbers.
  - dustincoates 2y ago
    You don't need the high cost and low cost areas to flip to be caught out. You just need the high cost areas to decrease in price and then it's immaterial whether the low cost areas increase in cost or not. There's no way they can decrease the same amount as the high cost areas, seeing as there's a floor. Then that excess that people had planned for is no longer there. > The numbers are just made up and don't matter. You've asked why people care. They care because they've made their retirement plans on a made up number. Is that reasonable? I don't think so, and it's why I'm renting not buying. But you're tilting at windmills at this point to explain to people who have a vested financial interest why they're wrong.
- Qem 2y ago
  > Doesn't work out if your "investment" is underwater. With climate change it will be literally what will happen to many homeowners in low lying coastal areas some decades from now.
thisisnotauser 2y ago
Housing is a huge cut of your salary. If housing were affordable, that money could be saved for retirement. Instead, it's paid toward a mortgage by necessity. So there is little room for savings other than hoping the house sells when you retire.
- globular-toast 2y ago
  It doesn't have to be. You could live in a small place in a shit area miles from anything. But most people choose to allocate a large amount of their income to housing. This is what sets the pricing for housing in the good areas. In other words, housing will always be a huge chunk of your income because it's hugely important. The only way it could be less is if it stopped mattering where you live. Then housing would be essentially a commodity and priced accordingly. It's important to realise that money is an abstraction that we use to do trade, but it's not trade itself. Pricing is a reflection of market forces. You can't just magically change the price of housing and suddenly have more of everything else with no compromises. You have to change the market. People always say "more housing*, but that's incredibly naive. More housing in the UK means tiny plots of land crammed in next to a dual carriageway in the middle of nowhere. People don't want to live there, but there's no choice. As long as there's inequality there will be high house prices. Turning housing into a commodity such that you can allocate only a small part of your income to it would take a lot more fundamental changes towards equality like vastly improved public transport, decentralisation of business, turning the most beautiful areas into national parks instead of estates owned by the rich etc.
hnthrow90348765 2y ago
Interest rates for individuals buying homes should be near zero. This needs to be subsidized by higher interest rates or taxes-on-businesses elsewhere.
pakitan 2y ago
> Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. No, it's not immaterial. If you paid $1M for something and next year that something is worth $500K, it's a problem, regardless of whether you own it or it's mortgaged, regardless of whether you plan to sell it or live in it. You lost $500K, it's as simple as that.
denkmoon 2y ago
my mortgage doesn't decrease if my house loses half its value.
deleted 2y ago
[deleted]

dustincoates 2y ago

> Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. I don't know how it is in the UK, but in Paris, I hear from a lot of people that their retirement plan is to sell their Parisian apartment and move to a lower cost area with what they've gained. Doesn't work out if your "investment" is underwater.

globular-toast 2y ago
If the Parisian apartments become undesirable and the low cost areas become desirable then, yeah, it wouldn't work out. But that's not what we're talking about. House prices going down across the board makes no difference. You sell your apartment for a lower number but you buy the new place for a lower number too. The numbers are just made up and don't matter. You can't eat a number and it won't keep you warm or dry. It's so weird to me that even in a place like this people can't see beyond the numbers.
- dustincoates 2y ago
  You don't need the high cost and low cost areas to flip to be caught out. You just need the high cost areas to decrease in price and then it's immaterial whether the low cost areas increase in cost or not. There's no way they can decrease the same amount as the high cost areas, seeing as there's a floor. Then that excess that people had planned for is no longer there. > The numbers are just made up and don't matter. You've asked why people care. They care because they've made their retirement plans on a made up number. Is that reasonable? I don't think so, and it's why I'm renting not buying. But you're tilting at windmills at this point to explain to people who have a vested financial interest why they're wrong.
Qem 2y ago
> Doesn't work out if your "investment" is underwater. With climate change it will be literally what will happen to many homeowners in low lying coastal areas some decades from now.

thisisnotauser 2y ago

Housing is a huge cut of your salary. If housing were affordable, that money could be saved for retirement. Instead, it's paid toward a mortgage by necessity. So there is little room for savings other than hoping the house sells when you retire.

globular-toast 2y ago
It doesn't have to be. You could live in a small place in a shit area miles from anything. But most people choose to allocate a large amount of their income to housing. This is what sets the pricing for housing in the good areas. In other words, housing will always be a huge chunk of your income because it's hugely important. The only way it could be less is if it stopped mattering where you live. Then housing would be essentially a commodity and priced accordingly. It's important to realise that money is an abstraction that we use to do trade, but it's not trade itself. Pricing is a reflection of market forces. You can't just magically change the price of housing and suddenly have more of everything else with no compromises. You have to change the market. People always say "more housing*, but that's incredibly naive. More housing in the UK means tiny plots of land crammed in next to a dual carriageway in the middle of nowhere. People don't want to live there, but there's no choice. As long as there's inequality there will be high house prices. Turning housing into a commodity such that you can allocate only a small part of your income to it would take a lot more fundamental changes towards equality like vastly improved public transport, decentralisation of business, turning the most beautiful areas into national parks instead of estates owned by the rich etc.

hnthrow90348765 2y ago

Interest rates for individuals buying homes should be near zero. This needs to be subsidized by higher interest rates or taxes-on-businesses elsewhere.

pakitan 2y ago

> Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. No, it's not immaterial. If you paid $1M for something and next year that something is worth $500K, it's a problem, regardless of whether you own it or it's mortgaged, regardless of whether you plan to sell it or live in it. You lost $500K, it's as simple as that.

denkmoon 2y ago

my mortgage doesn't decrease if my house loses half its value.

deleted 2y ago

[deleted]